Jeronimo Martins Pe

Good morning, ladies and gentlemen, and thank you for joining this call. Before I take you through the Geronimo Martins 2025 full year results, I will give the floor to our chairman and CEO, Mr. Pedro Soares Sánchez. Mr. Pedro Sánchez, the floor is yours.

Good morning, ladies and gentlemen. After a very tough 2024, 2025 was again a very challenging year for our companies in the countries where we operated. We knew it would not be a walk on the park, and it wasn't. Quite on the contrary, we face pressure everywhere. Global geopolitical and trade tensions, severe supply chain risks, only aggravated by the very recent escalation in the Middle East, have been weakening growth and negatively affecting consumers. and also business confidence. Our solid sales performance in the year was achieved in a context of very price-sensitive consumers and of tough competition. Biedronka celebrated its third anniversary with a reinforcing commercial dynamic and price leadership. Despite the very intensive competitive environment, driven by expense capacity of all players in a food market that lose volumes for the second year, once again, Bia Dronca gained market share. On top of the strong focus on sales, Bia Dronca adapted a heavy feast on costs and paid extra attention to productivity to compensate for raising costs, particularly wage-related. We are fully aware of how much the sustainability of our business rely on sales moment to dilute fixed costs, particularly when labor expenses across the group are increasing above the pace of the sales growth. Our extreme focus on the top line is rooted in this awareness and I see no room for relief. on this matter. In 2025, the response of our companies in the face of multiple sources of pressure on cost was decided to protect profitability. On top of the volume's growth, cost discipline, productivity, initiative, and efficiency gains were crucial for the increase in EBITDA margins for the first time since 2021. In 2025, we kept a fast pace of expansion, and with Viadronka's interest in Slovakia, we headed one more country to our portfolio. In Colombia, ARA continues to strongly invest in a price-driven total sales to surpass the 3 billion euros market and significantly improve everything. In all countries where we operated, we made good progress in our sustainability agenda. With what regards the environment, in 2025, for the first time, we were recognized by CDP with a triple A regarding all three of its programs, climate, forest, and water. We are proud to be the first and only food retailer in the world so far to achieve this level of performance. Regarding the social dimension, and on top of the company's own programs, I highlight the work of the Adronka Foundation, to which 20 million euros were channeled in 2025, and of the Gerardi Martins Foundation that concluded its setting up process. As we ended the year with a solid net cash position of 866 million euros, We increased the donation to Biedronka Foundation by 5 million euros to 25 million euros in 2026. And the board will propose to the stakeholders meeting the payment from 2025 net earnings of 40 million euros as an endowment to the Geronimo Martins Foundation. In line with our definition defined policy, we also present to the shareholder meetings a dividend payment proposal. I personally believe that profitable and sustainable business growth goes hand in hand with satisfied stakeholders and less unequal society. And this is why as long as our business keep delivering on their targets, we will maintain our contribution as responsible corporate citizens. We can only truly help the others in a sustainable way from a strong and solid position. That means putting the best of our knowledge and capabilities at the service of business growth so that our business can then play an important social role they are expected to. As we move forward into the very uncertain and risky 2026, we will balance ambition and prudence and perform regular reality checks to make sure we are fast and effective in deciding and implementing whatever adjustments we may deem necessary. And Alwiza will now take to the full year results. Thank you very much for your attention.

Thank you, Chairman. As a reminder, in our corporate website, you can find the results released, a slide presentation, and a media presentation for the year. The group's performance in 2025 translates our company's strong commitment to deliver against a very volatile geopolitical context marked by global commercial tensions. In a demanding operating landscape characterized by cautious consumer food spending and heightened competition within the food retail sector, our banners were able to manage the anticipated challenging combination of low basket inflation with cost inflation, particularly on labor. Group sales grew 7.6% ahead of 2024 to reach 36 billion euros as a result of consumers' acknowledgement of and preference for our strategic focus to guarantee price leadership, innovate in our assortment, and improve shopping experience. Robust top-line growth and disciplined cost management translated into EBITDA of €2.5 billion, an increase of 11.1% year-on-year. Group EBITDA margin was 6.9%, 22 basis points up on 2024, despite persistent cost inflation and a highly competitive pricing environment. Building on this strong operational performance, cash flow reached 537 million euros, further strengthening the group's balance sheet after the successful implementation of a comprehensive investment program. All in all, The persistent adaptability and responsiveness of our business models drove a pre-tax ROIC of 20.1%, broadly in line with prior year. Despite all the challenges and hard work to deliver growth, we also made good progress on our sustainability agenda. Later this month, we will publish our annual report, which will provide detailed information on what the teams delivered on all fronts of our corporate responsibility agenda. For now, I would mention a couple of achievements. First, Geronimo Martins became the first international food retailer to receive a AAA rating from CDP on its climate, forest and water programs. And second, despite strong expansion and consistent sales growth, we achieved an 18.4% reduction in our scope one and two carbon emissions since 2021 the baseline year for our science-based targets and climate transition plan commitments. A final word here on the investment of more than €360 million in employee recognition. Our people remain, as it should, at the center of our corporate responsibility agenda. Looking now at the P&L for the year, I would like to highlight the following. At the operational level, the performance was driven by a combined focus on sales and cost discipline. Robust sales and reinforced cost discipline and efficiency protected the BTA despite significant wage inflation and intense competition. The execution of the investment program is reflected in the evolution of both depreciation and net financial costs, as the latter also include the interest expense of capitalized leases. The other profit and loss heading considers write-offs due to refurbishments, restructuring costs, provisions for legal contingencies, and the 40 million euros endowment attributed from the 2024 net earnings to the Jorni Martins Foundation. It also includes 28 million euros recognizing the extraordinary execution efforts of the operational teams who managed to deliver sales volume growth in highly demanding markets while improving operational productivity. Specifically on Q4, While EBITDA margins follow the pattern for the year, there are a couple of one-offs I want to pinpoint. The first relates to gross margin. The improvement in Q4 is primarily explained by a one-off adjustment on the provisions for inventories depreciation, as our auditors concluded we were being too conservative on this computation. It also helps the positive mix in Portugal and in Poland, mainly driven by successful Christmas campaigns, in the case of Pindos and Biedronka, and by a proactive mix management at Hebe. The second relates to OPEC's oversells, as several factors resulted in more pressure on costs in Q4. There were significant store and DC pre-opening costs in some companies. It is the case of Ara and Recheio. and also some further labor costs due to heavy execution during Christmas season, as well as to the implementation of several material projects, being an example the deposit return system. Cash flow for the year before dividend payment was strong at 537 million euros, reflecting the solid operational performance of the banners and the normalization of funds generated by working capital following the adjustments recorded in 2024. The group ended the quarter with a solid financial position comprising net cash of €866 million. In 2025, the investment program totaled €1.2 billion. The focus was on taking our banner even closer to consumers by opening new stores and at the same time implementing the latest equipment and layout standards in existing stores, enabling us to improve the quality of the assortment and operational efficiency and enhance the shopping experience. All in all, we opened 448 stores. In this regard, I highlight Viadunka's entry into Slovakia with the opening of 15 stores and one distribution center in the year. Our remodeling program is of strategic relevance and in the year covered 281 stores across all businesses. Adding to the capex, there was an additional 85 million euros of financial investments channeled mainly to salmon and cod aquaculture operations in Norway. Looking now into the detail of the performance, I will start with sales. All companies performed well, registering positive volume increases and adding, also with a positive contribution of the Zloty exchange rate, 2.5 billion euros to the group's total sales. Consolidated sales grew by 7.6%, 6.7% at constant exchange rates, to reach €36 billion, driven by a like-for-like of 2.5% and a solid contribution from expansion. In analyzing each banner's performance, I'll start with a quick overview of the context, beginning with Poland. Despite solid economic performance, lower interest rates and almost full employment, Polish consumers remained cautious and restrained in food consumption. The average food inflation for the year outpaced the 2024 figure, but it is important to keep in mind that food prices evolution began slowing from September and ended the year at 2.4% with year-on-year deflation in some categories. In this context, Biedronka reaffirmed its price leadership and well-recognized promotional dynamic. In parallel, a lot of work was done to innovate in the assortment and enhance shopping experience. All in all, the panel delivered one more year of outperformance, having added nearly 1.8 billion euros or 1.4 billion euros at constant exchange rates to its top line and increased its market share. Total sales reached 25.3 billion euros, 7.5% ahead of 2024, or 5.9% at constant exchange rates, including a like-for-like of 1.9%. Q4 like-for-like growth was solely volume-driven, as country food inflation slowed and Biadronk experienced basket deflation from November onwards. Hebe faced an extremely competitive market and operated with basket deflation. Leveraging the exclusivity of its assortment, the company protected its position and grew sales by 7.4%, plus 5.7% at constant currency to 626 million euros. Moving on to Portugal, the economic performance was resilient and all the consumers remained focused on value and price, increased population, mostly immigrants, supported growth in the food retail sector. Through an intense promotional dynamic and benefiting from reinforced differentiation enhanced by its all about food star concept, PINGDOS grew sales by 5.5% excluding fuel. Having increased volumes, clients, and average purchase, the banner delivered a strong 4% like-to-like growth. Pingu Dulce's range and quality of fresh products and ready meals now match the updated store layout, providing a clear competitive edge in a market where all players are adding capacity. Recheio also enlarged its client base and increased volumes, having reached €1.4 billion in sales, 3% ahead of previous years. this solid performance was supported by both segments, ORECA and traditional retail. Goucher's unique B2B value proposition that provides competitive pricing, tailored offers, and reliable service to its different customers has just been enriched with a long-time desired new addition. A major greenfield store in the Lisbon area opened last February. In Colombia, 2025 remained a tough year for families. Inflation stayed high, pressuring consumption and reinforcing a very price-sensitive and promotions-driven environment. Nonetheless, we did see early signs of macro-stabilization as the year progressed, with improvements in consumer sentiment and demand. AIDA kept the intensity of its promotional agenda on top of everyday low prices. By reinforcing price competitiveness to be the first choice of consumers in the neighborhoods where it operates, our Colombian banner delivered a strong performance with sales growing by 13.3% or 17.4% in local currency to reach 3.2 billion euros, nearly half a billion more than in 2024. Like-for-like growth was at 5.8%. Importantly, performance was mainly volume-driven as basket inflation remained consistently below country food inflation, reinforcing Irish value proposition and price perception. This performance reflects strategic focus, rigorous execution, and growing relevance for Colombian consumers. Consolidated EBITDA amounted to 2.5 billion euros, increasing 11.1% or 9.9% at constant exchange rates over 2024. All business contributed to this performance, with robust sales growth combined with cost discipline. Group EBTA margins stood at 6.9%, 2022 basis points up on 2024. At Piedronka, EBTA grew 9.8%, up 8.1% in local currency, with the respective margins standing at 7.9% versus 7.7% in 2024. Solid sales growth. disciplined cost management, and increased focus on productivity mitigated the pressure generated by price competitiveness and cost inflation, mainly wage-related. Hebei, in a highly promotional environment, worked hard to protect profitability by optimizing its sales mix and deepening cost management, driving EBITDA to grow 9.7% or 8% in local currency, with the respective margin reaching 10.4% versus 10.2% in 2024. At DING2, EBITDA grew 8.5%, with the respective margin increasing to 6% from 5.8% in 2024, driven by sales growth and systemic initiatives to increase productivity and offset cost pressure. Rocheu delivered EBITDA growth of 4.6%, with the margin standing at 5.2% versus 5.1% in 2024. In addition to a positive sales performance, growth was supported by Rocheu's extremely competitive positioning in the oreca channel enabling the banner to capitalize on stronger dynamics in this segment out of the bta grew 37.6 percent up 42.7 percent in local currency with a corresponding margin rising to 4.1 percent from 3.4 in 2024. besides sales growth The strong margin performance reflects the consistent work started in 2024 to protect the company's gross margin and limit the impact on costs from inflation and labor reform. In 2025, we successfully navigated a highly demanding operating environment by remaining firmly focused on consumer needs while maintaining tight operational discipline. Leading price positions, continuous assortment innovation, and enhanced store format allowed us to strengthen our value propositions and to keep consumer preference across all banners. This translated into solid sales growth, volume increases in every business area, and continued market share gains. At the same time, we managed the business with a strong emphasis on efficiency and operational productivity, both in stores and distribution centers. This balance between commercial intensity and operational rigor enabled us to deliver robust returns, with pre-tax ROIC reaching 20.1% and cash flow generation of 537 million euros. We also delivered consistently on our capital allocation priorities. An ambitious CAPEX program was executed as planned, supporting network expansion, refurbishments, and logistics development while our dividend policy was fully met. As a result, We close the year with a strong balance sheet, a reinforced positive cash position, and a solid platform to face a very uncertain operating context. Looking ahead to 2026, our strategy remains unchanged. We will keep firmly focused on consumer needs and expectations across all markets. Our banners will continue to prioritize price competitiveness, supported by effective promotional campaigns and the ongoing development of their assortments, in a context where consumers are expected to remain highly value-driven. The operating environment remains challenging. Heightened geopolitical uncertainty continues to waste on the confidence of families and remaining economic agents, and competitive intensity across our markets is very unlikely to ease. Against this backdrop, we will continue to enhance our market presence, by executing our expansion plans with precision. Our primary focus will be on Biedronka, where we anticipate opening more than 120 new net locations, and Ara, which is expected to see the addition of over 200 stores. Furthermore, elevating the quality of our store networks and strengthening our logistics capabilities, both critical pillars of our operational competitiveness, will stay as top priorities. As a result, Investment remains our key capital allocation. In 2026, we expect the CAPEX program to reach around 1.2 billion euros, supporting growth, productivity, and long-term value creation, while maintaining a prudent and balanced financial profile. Thank you for your attention. Operator, I am now ready to take questions.